With the current trend towards cutting costs, FSTE 100 firms are looking to reduce their legal costs. A recent Legal Week article cites some good tips on how law firms can combat the price crunch to add value.

The most important out of 12 criteria? “Understanding the client’s legal requirements in a commercial context.” Unfortunately, when clients grade their firms, this ranks 7th, emphasizing the need for law firms to understand their client’s business.

Other interesting comments include a backlash against billable hours

Respondents reluctantly accept that their legal advisers are joined at the hip to hourly billing. However, they are increasingly insisting on some form of retrospective value assessment in conjunction with what is on the clock.

Firms that do this proactively, amending their own bills according to value delivered, are a step ahead of the game. The perception that US firms ‘bill to the death’ will put them at a disadvantage in this area.

“Charging by the hour is a damaging thing for law firms to do, but they make a lot of money, so why should they change when schmucks like us are prepared to pay?” observes one client.

And the focus on client relationships as the differentiating factor

Clients still stress that they follow individuals, not firms. Explore the reason for this in more depth and lurking beneath the service is, aside from size and location, the fact that law firms are seen as largely undifferentiated.

Partners are differentiated. A clear set of distinct values that the whole firm consistently works to would be a good start in providing meaningful differentiation. This is something that most firms are less than comfortable with.

As one respondent put it: “If they asked their own people what they stood for, they would get a pretty clear picture, but what they try and present to clients is so anodyne and watered down.”

» Read Article: The client is key

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